Airport sale deal delayed

From the archive, first published Thursday 6th Apr 2006.

A delay in the privatisation of Shoreham Airport has fuelled rumours that a £10 million fraud investigation has plunged the deal into crisis.

The historic airport was due to be taken over by property specialists the Erinaceous Group on April 1 but that date has now been scrapped.

Speculation the delay was linked with a police and Serious Fraud Office investigation into a £10 million fraud at one of Erinaceous' London offices began to circulate after an internal memo was sent informing Brighton and Hove City Council staff of the delay.

The leaked memo, written by a senior council manager and seen by The Argus, said negotiations were on-going and the deal was unlikely to be concluded before the end of April - more than a month late.

Erinaceous spokesman John Underwood denied the delay has anything to do with the arrest of Ian McGarry, the City of London head of valuations for Dunlop Haywards, part of Erinaceous, over the alleged £10 million fraud.

Mr McGarry was released without charge but remains suspended from work while police investigate the case.

The fraud allegations, confirmed in a statement by Erinaceous to the London Stock Exchange, centre on property prices being deliberately inflated to obtain extra borrowing from the Cheshire Building Society.

Union leaders had warned of problems with some buildings at the airport.

The Argus was told Erinaceous took another look at the facilities and realised it was going to cost more than first thought to bring them up to the required standard.

But Mr Underwood denied this was the case.

Alex Knutsen, secretary of Brighton and Hove Unison, of which many airport workers are members, said: "I am trying to find out urgently why there is suddenly this delay.

"Whatever the reason is, what I want answered is why it has suddenly come up now when the transfer has been arranged for months?"

But Mr Underwood said the airport deal was being delayed solely because of a hitch over pensions and said he would be "gobsmacked if the deal was not concluded very soon".

He said: "I'm absolutely sure there is no problem. There is no question this is in any way connected with the alleged fraud at the company's Dunlop Hayward office.

"A big takeover like this is always likely to have one or two technical difficulties. It is much like buying a house.

"Just when you think the deal is about to go through you find that form X1923, or whatever, is not completed and needs to be done.

"There is always likely to be one or two loose ends to tie up and I have no doubts that the deal will be fully completed very soon."

John Haffenden, manager of Shoreham Airport, said the takeover was still on track but did not comment on the fraud allegations.

A campaign group fighting the expansion of Shoreham Airport is to hold a public meeting on Saturday.

Communities Against Runway Expansion (CARE) will hold its AGM and discuss plans for the expansion.

The meeting is at Lancing Parish Hall, South Street, Lancing at 2pm.

Thursday, April 6, 2006

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